Entries in 'Captain’s log' ↓

I’ve recently been provoked to take a serious look at Kaplak again. I thought I would drop a few lines in this place to announce that I’m back to work on Kaplak – if only in a tiny slice of my time – but no less ambitiously.

The truth is I’ve never really left. For various reasons, it made a lot of sense to close down the company Kaplak and focus on other things, but I’ve never quite left the ideas we worked with in Kaplak, and I believe the world still needs what we had coming for it. In the meantime there’s not much else to do but figure out ways to build upon the experience we had then.

So in the back of my head, this is what I have been doing. I am right now on three months of parental leave from work – which among other things, have lent me some long-missed time to think about the meaning of my life and the connected world. When teaching one does actually do a lot of thinking – but it’s mostly about teaching and planning classes and lessons, and not much else. Since August 2009 I’ve been teaching history and media full time at Aabenraa Statsskole – and since the summer of 2007 I’ve also had two kids (one now aged 4 and one nearly 9 months), which in sum means that my life is totally different today than what it was when I first started Kaplak.

So what did provoke me to take yet another long arduous journey to the far far away land of the slim ends of the long tail? (Plural because they come in large numbers!) Among other things, I’ve come across a couple of online phenomena which deserves a few words in this space.

Google+
Earlier this year Google launched Google+ which I have embraced and played with – at times enthusiastically, at others somewhat reluctantly. It’s like Friendfeed has come back – but different and with a whole new feature-set, which combines the best of what Twitter and Facebook have to offer. But it’s still a proprietary monster, where Google (among many other things) gets to decide what their users are ‘allowed to call themselves’, simply because while Google+ empowers users to share their stuff in ever more flexible ways, the network is still owned by Google and this ownership is never in question. Nevertheless, the ease of sharing stuff on Google+ has made me into a regular poster.

Google has been quick to add hashtags to it’s service, and I’ve now begun to add hashtags to my stuff, which makes it easy to find #copyfight stuff and posts on #landvaluetax, as well as all those #thingsthatmakeyouseetheworldjustalittlebitdifferently. It often has stricken me though, that I ought not to use Google to make what is in essence niche micro sites much like the ones we were developing with Kaplak Stream. Instead, I’d like to share stuff using WordPress as a platform as we did in Kaplak, and only use Google+ as a secondary channel.

If this then that
Just recently I stumbled (via my Google+ network) across an online service which goes by the name If This Then That, which stirred up a lot of thoughts about Kaplak in the back of my head. Occasionally I come across something which contributes a piece to this ongoing puzzle. Ifttt, I believe, is such a piece. Now these stirred-up thoughts have fallen into place again, and although a lot of the ideas we worked with in Kaplak remains (making a sound business out of less-than-popular (“long tail”) products – and transforming work life and the universe as we know it in the process), some have landed in new places.

My instinct tells me that Ifttt (and similar services) paves the way for the future of the internet. Ifttt truly empowers users because it puts users in charge of the what, when and where of their online activities – not the services they use. It widens a door already opened by the APIs of online services, which adds a new parameter to the equation. Companies such as Facebook, Google and Twitter will increasingly have to compete on how well they serve the needs of users to bring their data where they need them to go (and in that process make more data available flexibly and cater to the needs of services such as Ifttt) – and not where those companies would like them to go.

Now, what does this entail for Kaplak?

We had two working strategies in Kaplak – one was widgets, the other was Kaplak Stream. Both aimed at the same target : selling niche products in rich niche contexts, which would easily be found by their niche customers, and in doing this connecting seller with buyer. The middleman – the “skipper” making the connection, would in turn earn kaplak, a percentage of the product value given by the seller.

Now, it’s a top priority to concentrate efforts on making Kaplak economically feasible. This means, that with the greater ease and the less hazzle we can create these connections, the better, as the turnout (kaplak) from each sale must be expected to be very small. Therefore, we will focus on the “stream”-approach, but with a few decisive changes to make sure we must do as little “clean up” and maintenance as possible – more on this at a later time and place.

This aligns well with what my life looks like right now. Among other things, I can not dedicate as large a portion of my time as I would like to build up Kaplak, at least at this point in my life. I will keep teaching history and media, and continue to devote a large part of my spare time to my precious family.

But what I do have, are those spare minutes during the day, which cannot be used for much else. I will continue to cruise the web and share stuff, using my phone, my laptop and my PC. But increasingly I will ‘share with Kaplak’ i.e. develop a sharing platform and work out posting routines accordingly, using Kaplak – rather than use Google+ just because I am too lazy to use my own platform. Google+ has other excellent possibilities and uses – but should never be the end destination for shared stuff, no less so than Facebook or Friendfeed should.

Using services such as Ifttt we can easily distribute items to their proper place, and since I’ve last worked seriously with WordPress, useful and valuable plugins such as FeedWordPress has only improved – and will assist to help create the niche sites, which in turn will deliver the helpful contexts for future Kaplak products.

What is important though, is that I sense that it is in fact possible – right now, using the tools that we have right now – to build a site architecture, without the need for a lot of coding, which will (if very slowly, to begin with) help accomplish the beginnings of what we set out to do with Kaplak.

Earlier this winter Rasmus Dahlberg of the Odense-based publishing house Det Historiske Hus asked me ‘why we had founded an association and not a company?’. I answered something to the meaning that the association was much more flexible than a formal business at this point, where we still needed to put together the right team, find investors and expand our network etc. I also told him, that I wasn’t sure if our leadership and organization was in place etc. All these things were true enough.

A few weeks later the association exploded in my face. As a matter of fact, I did see it coming, but, I’m sorry to say, didn’t react swiftly enough on the early symptoms and gut feeling I had. I didn’t realize our differences would escalate into open conflict. Instead I nurtured the vain hope that our differences and different backgrounds would only make Kaplak stronger. Now, the association is no more, and has been replaced by a regular for-profit company. And this is all for the better.

For a long time I have wanted to elaborate on the background of these developments here, but have held back, because I’ve dreaded the painful aspects of reliving the conflicts we had. Yet I know this is something we need to be open and talk about. We want to create an open business, which dares be vulnerable too and openly show what the process of building a company like Kaplak entails, even when it’s rough. It also may allow other startups to learn from our experience.

Last and not least I hope and think that this article may also be part of our internal healing process, which we need to cater to – before we shoot ahead into our bright future.

What went wrong with the association?

The Association of Kaplak Investors (Kaplak Investorforening) was founded on October 15th 2007 by Morten Blaabjerg, Jens Wellejus and Jesper Böttzauw.

We chose to found an association because we believed it would be more flexible and better able to expand the circle of ressourceful people around the project, as well as attract further capital. We needed candidates for several key roles on the team, as well as more capital to create the company we wanted. The association was a method for hooking up our different professional networks, which would help provide the team members we sorely needed, while we jointly saved up cash for a ‘real’ company.

All this was very good in theory, and this idea may indeed have spawned such an outcome, if we’d been a larger circle of people to begin with, with a higher willingness to lay down real money on the table. As it was, it relied too heavily on too few members to invest in the company, as well as lobby and activate their professional networks to also invest and become members of our association. And it relied (too) heavily on information sharing between members, about activities, valuable contacts and potential customers in our networks, and between the association and new investor prospects.

In return for this, all members were given equal influence on proceedings, in their vote and electability for board membership, regardless of the value of their investment. This spelled trouble.

In fact, this choice of organization proved less than flexible. Formal proceedings became too great a mouthful for too few people involved, taking valuable time and ressources from more important tasks, i.e. developing Kaplak as a company. If the association was to work, we needed to work hard to expand it and nurse it, as much as we needed to work on Kaplak the business. At the same time, I had a growing feeling that my partners, albeit enthusiastic about the project, wasn’t so enthusiastic as to actually invest human money, or alternatively, spend more time to help attract and close further investments for the company, and in doing this expand the circle of ressourceful people connected to the project. I felt I was the only one working on the project, but without real ownership to my work, as it became the property of the association.

The conflict arose between Jesper and myself, with Jens in the impossible position as a mediator or taken hostage between us. There were deeper misunderstandings and differences at stake, but the point of conflict was our new wiki.

From the very beginning of Kaplak in the spring of 2007 an internal (and later public) wiki was a key element in Kaplak’s communications and information sharing plan. It was in the first business plan.

Now, when the wiki finally was online in late November, Jesper suddenly objected to using it, even when asked directly to do so. I found myself spending more and more time “persuading” or trying to trick Jesper into using the wiki. One key goal of the wiki was to abolish email as a knowledge sharing tool, yet I kept spending an increasing amount of time in one-to-one bottleneck email correspondance with my partner. This was frustrating, because we could have used all the energy put into emails and explaining back and forth to build our wiki at the same time. My point was then and still is, that there’s no saying “I don’t understand it” when you’re in front of something new, without willingness to dive in and try things out and experiment. Without this willingness to try new things you’ll never learn what it is. This goes for wikis in particular. As an experiment, I copied all of our correspondance into the wiki. In part, because I hoped to show, by example, that we could have this exchange in the wiki just as easily – everything readable and editable by anyone in our circle, not limited to two people. But nothing really happened. Jesper felt reluctant to share any details on his contacts and possible Kaplak customers in his network, although this sharing and connecting was in fact a key contribution of his to Kaplak by his contract. I didn’t feel he trusted me, my leadership or the company, and I slowly lost faith in him as a partner. These events were probably inevitable, given our series of misunderstandings, difficulties and conflicts of which I describe only some here.

In early January we had a very loud board meeting, which culminated with Jesper leaving the board. At this meeting I tried to demonstrate, that Jesper’s efforts didn’t amount to what he had said he’d deliver : leads and contacts. Jesper in turn said he had been talking to a lawyer about my ‘criminal act’ of copy-pasting our ‘private’ correspondance into the wiki, which he believed to be in violation of Danish law. This ended the meeting, as I can’t tolerate a partner who believes I am a criminal, and who had the audacity to discuss these alleged criminal offenses with a lawyer before considering the interests of the company. I can’t live with a partner who’d rather discuss my possible acts of crime with a lawyer, before he’ll contribute value to the company, do the work much needed, and learn to use the tools he’s been given to do so, and by all this protect his own investment in the company.

In addition, I could under no circumstances spend time arguing about any possible grounds for such accusations, because that would just even further lead focus away from what was important : building a great and durable business. To put it bluntly, I found the accusations ridiculous, but also revealing, in terms of how deep our differences struck in relation to Kaplak. Kaplak is a company and product based on technologies of sharing : open source, wikis, filesharing protocols, copy-paste, widgets which flow from platform to platform and so on and so forth. I couldn’t see my partner representing Kaplak in this sense, and this effectively terminated our business relationship.

It was the final straw in a chain of events which spelled out the need for simplifying things. The board was in effect put out of business, unable to legally enter into agreements on behalf of the association. I resigned as a chairman, although I continued to run Kaplak as a CEO, according to my contract for 2007, but without any certainty that my work would be authorized with a new contract for 2008.

Now I worked without any ownership to what I made. This was clearly intolerable.

One thing was sure. I didn’t want Jesper on the board, and I wasn’t very happy to have him as a partner. But it wasn’t any sufficient solution to simply replace one board member with a new one. The real problem, as I saw it, was that influence was awarded to any member of Kaplak on completely equal terms, regardless of investment or value contribution. As a majority investor, CEO and chairman, I technically had to refer to the board, i.e. myself and my partners, even though I owned much more of the company, than my two companions.

This in effect undermined any motivation for further investments in the company by members, as well as for inviting others to join the circle. This also undermined the authority and leadership of the association. Why invest in something you couldn’t be sure (theoretically) wouldn’t be led by a completely different group of people after the next general assembly? Why respect leadership among ‘equal visionaries’? Why work for and respect an assocation which claimed ownership to the company and it’s values, but wasn’t capable of delivering the ressources, it was created to facilitate?

Something needed to be done about this. If we kept going without abiding by the formalities of the association, we would just undermine the authority of the organisation even further, and risk undermining the entire project. We could try to get a stand-in for our board, to sign documents which would subsequently have to be approved by our general assembly. We could change the rules and demand cash investments from all members, in the hope that this would lead to a more responsible board of investors, who would be more careful about protecting their own investments. In other words, we could patch up things a bit and try to keep going until we acquired more members and investments – or until we were fed up with working for nothing, while our business suffered.

Or we could realize that something was wrong with our choice of organisation, at least at this level of Kaplak’s development. We could abolish it altogether, in spite of fears that it might not be very pleasant.

The association was designed to be difficult to abolish, and dissolving it meant to deprive present members of formal influence on the project, and carry over investments and agreements to a new company. As it was, I was the majority investor and only investor of capital so far, but this didn’t provide me with any special influence in the association, where the highest authority remained the general assembly. Two extraordinary general assemblies were needed to dissolve the association, each called with 14 days notice.

The first assembly took place February 21st, which was in effect an ultimatum to all members. To be square : put money on the table or lose influence – or alternatively, abolish the association. An ultimatum may not be the best road for dialogue, but I wanted to make sure the seriousness of the situation was manifest, and that this could not be sweettalked away. I also made it clear, that if we weren’t capable of electing a new board at this assembly, I wanted to dissolve the association. This in effect meant, that we needed at least one new member to sign up before or at the assembly, which made it hard to resist laying down the organisation.

I was the only attendee, which I took as another testimony to the malfunction of the organisation and as a time to wake up to the fact that I had chosen the wrong business partners.

On the other hand, it made things very easy. The association was formally dissolved at a second general assembly on March 10th.

The rebirth of Kaplak

Thus, we abandoned the association in favor of a regular for-profit business, which is the best thing that could happen for Kaplak. There is a re-established clarity of ownership and leadership, which is capable of reinstating confidence in the company. We can begin building income streams and develop Kaplak v1. We’ll do this by selling complementary products, i.e. products which complements Kaplak v1 and attracts the same kind of customers, i.e. somewhat web-savvy niche producers, who knows that they need to get out there with their product, but still has to find the best, precise, low-cost method and tools of achieving this.

To begin with Kaplak will be listed as a private single-person company. Under Danish law, there’s no capital requirements for this type of company. The new company honors the spirit of all agreements entered into by the association, with the exception, that A-shares will only be given to investors who invest a cash amount of a certain level in the company. Mikkel continues to be our hosting partner. As before, warrants will be effective when the company agrees to list as a private limited liability company (anpartsselskab), which requires a substantively larger amount of capital.

We’re also increasingly facing a choice concerning our communications strategy, which this blog post goes to prove. Open business and open communications is not just something you do when everything is running smoothly and there are nice things to report. If there’s something I hate it’s the superficial niceness of startups with only positive stories. This is not something which establishes confidence in my book.

In Kaplak we need to re-orient ourselves at a much more radical level of public openness. It may hurt our chances with certain investors, but then it’ll win us others who understand how we want to do business. The clear argument is that an open system can operate faster (no passwords to remember everywhere), grow bigger, be much more visible online, and invite readers as well as input to the company, at all levels of our activities.

If we want to attract the right people, we need to show a considerable openness concerning our challenges and problems too. And if we want to grow this market we’re in, we need to be daring enough to help others, who will also be our competitors. Because competition is a good thing. It helps you stay on your toes, and it sharpens ideas and business models. And if there’s something we need, it’s this. Smart people, capable of breeding and nurturing sharp ideas and business models.

Lynge gave a course of high inspirational qualities which I think made everyone in the room think really hard about their businesses, and about what kind of capital they need, how they’re going to get it, and how they’re going to communicate about what they intend to do with it, when or if they get it. Maintaining relations with the capital markets is a long term concern for companies with ambitions about growth and building a scalable business. You can follow my notes from the last two days’ course on Twitter.

Last year I discovered Twitter, inspired by video blogger and online infopreneur Raymond M. Kristiansen. Raymond worked very hard during the national election last year to introduce Video Blogging as a serious campaigning tool for the candidates of Radikale Venstre, the Danish Social-Liberal Party, of which both Raymond and I are members. I met him briefly then, and was tremendously inspired by his rigourous online activities.

Twitter allows you to post short (below 140 characters) messages about anything, and to follow others who do the same thing. One can send and receive messages via mobile phone as well as directly via the web. What is this useful for? Well, I’m still investigating. The constraint and mobility creates interesting results. Twitter can be anything from an individual’s stream of consciousness, two people exchanging mood swings or girl trouble or interesting links, or a group brainstorming ideas and theories. Twitter is a funny little thing. I haven’t quite figured out yet what to use it for, but today an occasion arose, which makes sense.

I’m participating in Oplevelsesiværksætter, a course in project leadership and investor relations for startups in the experience economy. The course runs for the next 4 months and focuses (unsurprisingly) on project leadership and investor relations. I decided today to use Twitter to share notes and thoughts about the course in relation to Kaplak. It fits perfectly with the way I write notes. I usually write things down to learn them better and reflect about what I’m doing. I don’t throw my notes away after such a course, but I very rarely read them again. I may as well share some of these thoughts and ideas online, while I’m at it. It tells a much less filtered story about Kaplak, as it unfolds from my perspective as leader of this project, which could be interesting for other entrepreneurs. All the time, everyone reading (other Twitter users) has the opportunity to comment and engage in the process as we go along.

Using Twitter for this kind of intimate log is also an interesting method of providing value to our company. Why can this be? Answer : it helps drive relevant traffic to our site. In this case, we want to attract potential “first” customers for Kaplak who are visionary and adventurous enough to seek out information on how to meet their online distribution challenges. Or simply feels the financial pain of imprecise distribution methods much harder than anyone else, because their market is too thinly spread for traditional retail systems.

On a related note, I’ve never experienced something as hard to explain to people than this, the intimate relation between hyperlinks and value. For most people it somehow seems utterly incomprehensible, that a hyperlink can be worth something. But in the end, this is what we at Kaplak is going to create our product around. Links matter, and it matters where you find them. The context the hyperlink appears in makes meaning. I’ll be very happy for any inputs on how to illustrate this connection between a “simple” reference and value.

I also want to say a big thank you to all of you, who have linked to Kaplak.com. It really is a great deal and means a lot to us, if you link to Kaplak.com from your website, blog, forum or email signature, or from your Facebook account.